My mission: Find technology for Early Adopters. Follow me: on Twitter @danwoodsearly on LinkedIn @ www.linkedin.com/in/danwoodsearly/ on myBlog @ http://www.CITOResearch.com. I am a CTO, writer, and consultant. For tech vendors, I help explain their technology. For users, I help find, select, and deploy new solutions that have explosive business value. I love to speak and share ideas.

How Adaptive Planning Creates A Moore's Law For Data

In “How To Create A Moore’s Law For Data” I asked the question: Why is it that adding more data to a company doesn’t automatically lead to more value? The way Moore’s Law works in computing is that increased transistor density leads to more powerful hardware which leads to better software. A well establish chain of innovation exists to make this happen every cycle.

Adaptive Planning, a vendor of cloud-based planning, consolidation, reporting and analytics software, has created in its product a similar chain of innovation. With Adaptive Planning, when new data arrives, it has a high probability of creating value not just for a small part of a company, but for the whole organization. There are many lessons for improving the way that companies run that come from a close look at how Adaptive Planning achieves this goal.

Isolated Spreadsheet Models: How Business Really Works

It doesn’t matter if you run a small business or a massive organization, most of the time there is a spreadsheet that is the core model of the business. The most common and most important of these spreadsheets is the financial plan that shows how much cash you have, how fast you are spending it, and when you are going to run out of money.

For larger products or other important processes like managing a sales pipeline there are usually more spreadsheets. In larger companies the spreadsheets at the highest levels are created by rolling up those at the lower levels.

The problem with this approach is that it is all disconnected and opaque. If you get better data for one of your spreadsheets, it is not available to other spreadsheets until a rollup occurs. If you have better data for what happens at a high level, it is not easy to explain with precision what must take place to adjust spreadsheets at a lower level. Even if you ask for everything to be redone, it is hard to know how the work is going and when it will be finished.

In addition, the context is lost. All the communication takes place in email or meetings. Exactly why a model works the way it does, why it was changed, what was learned is all spread all over the place.

It is important to note that in most companies, software like Salesforce.com and other SaaS vendors and project management systems like Clarizen have created solutions that solve some of the problems just mentioned. But these systems are often disconnected from each other and from the spreadsheets that run the company.

It is easy to see why this situation does not create a Moore’s Law for Data. When better data arrives, it may help one of these spreadsheets, but it doesn’t help all of them. The impact is limited.

Adaptive Planning’s Integrated Models

Now imagine that instead of having dozens of separate spreadsheets you had one integrated model that was connected so that rollups could happen in an instant. At the team level, the manager could model both the costs, activities, and predictions for what the team would be doing for the next year. The same would happen at the department, division, and company level.

Adaptive Planning’s integrated model creates a Moore’s Law for Data I’ve been looking for. When new data arrived at any level, it could make the model better for everyone. If better data arrived about market conditions, then the CEO could send a directive for the rest of the company to prepare for growth. If better data came in about the status of crucial project, then the impact of that could be seen instantaneously. If a manager figured out how to more accurately predict what was happening his or her area, then the rest of the company have a more accurate view of the big picture.

Adaptive Planning captures the context, both of the rationale for the models and the communication up and down the chain. The nerdy hero of Michael Lewis’s Moneyball story, Paul DePodesta, recommended at the Alteryx Inspire conference in 2013 that to improve a business based on data, you must keep a decision diary. Capturing context in this way becomes both a knowledge repository and a decision diary that makes the data more valuable. As people come and go, they can see the history of how the data has been used, where it is strong and where it is weak. (For more on the importance of context see “Preserving Context Is A Must-Have For Business Intelligence”.)

I’m sure that there will be many ways to create a Moore’s Law for Data, but the integrated model seems to be a hugely powerful method that can be applied in many business situations. Most business software is in one way or another going for the type of integrated model that Adaptive Planning creates. It is possible to amplify the value of your existing software by using it as part of a large integrated model.

Natural Extensions

Adaptive Planning amplifies this core value proposition in a variety of ways.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

Thanks for the great article on Adaptive Planning. I also liked your article on Moore’s Law for data. Are you looking for other companies or software solutions that could also be applied? We have thousands reviewed at www.itqlick.com. Come check us out if you have the time.